NU Online News Service, Feb. 24, 2004, 5:44 p.m. EST – A key employer group has asked the Internal Revenue Service to take a fast, flexible approach to regulating the new health savings accounts.[@@]
The American Benefits Council, Washington, has responded to an IRS request for comments about HSA regulation by emphasizing the need for some give in the early HSA rules.
Employers also need quick answers to some key questions, James Klein, the council’s president, writes in the comment letter.
“Many large employers need 6 months or more lead time to implement a new benefit option,” Klein writes. “Accordingly, we were encouraged to learn that Treasury anticipates issuing guidance on certain issues as early as next month.”
President Bush brought HSAs to life Dec. 8, 2003, when he signed the Medicare Prescription Drug, Improvement and Modernization Act of 2003.
MPDIMA makes HSAs available to employers that buy high-deductible health coverage. Eligible taxpayers can deduct HSA contributions from taxable income and spend HSA cash on qualified expenses without paying income taxes on the distributions.
HSA-compatible plans can provide no-deductible, “first dollar” coverage for immunizations and other forms of preventive care.
AAHP-HIAA, Washington, a health insurance trade group, says at least 63 of its members are either developing HSA products or thinking about developing HSA products.